The Credit Card Handicap in China

The recent acquisition of Bill Me Later by Paypal highlights the large descrepency between the online payment industry in the US and in China. In the US, discussion are about market share, growth, and added value to consumers. Increased competition (coupled with market growth) has led to a market for M&As, which over the last 6 years has included the acquisition of no less than two market leaders - Paypal to Ebay in 2002 and the recent Bill Me Later sale to Paypal.

In China, however, discussions are about business models, funding, and network buildout. One of the major holdbacks for online payment companies in China is actually the absence of an established credit card infrastructure. Paypal, while also offering a stored-value account payment solution, operates a payment platform that is closely reliant on established Visa and MasterCard payment networks in the US. Paypal offers merchants (especially smaller and medium sized merchants) the ability to accept credit card payments without have agreements directly with banks and credit card companies. Bill Me Later, while offering consumers value as an alternative to online payments via credit cards at merchant sites, actually still relies on Visa's and MasterCard's payment network in the backend for processing. Payment companies in China do not have the luxury of established credit card networks to develop online payments and that has immensely slowed industry development in China. 

As credit card networks and third-party payment networks in China develop simultaneously in China, we are seeing new types of payment models developing.

In our market reports, we take an in-depth look into the various types of online payment and mobile payment models being developed in China as well as the companies striving to become China's equivalent to Paypal. 

China Broadband Subscribers Increased by 1.5 Million in August

According to MIIT's latest statistics broadband subscribers this month increased by 1.521 million to reach 79.348 million. China Telecom's broadband subscribers increased by 0.7 million to reach 41.5 million and China Netcom's broadband subscribers increased by 0.3 million to reach 24.3 million according data release by China Telecom and China Netcom, respectively.

China PHS Subscribers Dropped by 1 Million in August

China Mobile Subscribers Increased by 7.63 Million in August

According to MIIT's latest statistics mobile subscribers this month increased by 7.63 to reach 616 million. China Mobile's subscribers increased by 7.2 million to reach 428.9 million and China Unicom's subscribers increased by 0.5 million to reach 171.8 according data release by China Mobile and China Unicom, respectively.

Approximately 459 billion SMS messages were sent this month.

China Fixed-line Subscribers Dropped by 0.99 million in August

According to MIIT’s latest statistics, fixed-line subscribers dropped by 0.99 million in August. China Telecom’s fixed-line subscribers dropped by 0.7 million and China Netcom’s fixed-line subscribers dropped by 0.4 million.